Sherwood drilling links high-grade areas at Kutcho

Vancouver — Drill results from Kutcho’s Main zone continue to return high-grade copper intercepts for Sherwood Copper (SWC-V, SWOPF-o).

The near-surface Main zone is one of three mineralized areas Sherwood has defined at Kutcho. Because the other two, Sumac and Esso, are well below surface, the company has concentrated its efforts on the Main zone resource, which has open-pit potential.

Sherwood’s June 2008 resource estimate puts the indicated resource at the Main zone at 17.3 million tonnes grading 1.56% copper, 2.12% zinc, 0.29 gram gold and 26 grams silver per tonne.

One of Sherwood’s aims with the latest round of drilling was to link high-grade mineralized areas together.

Holes 155 and 157 appear to fill in some of the gaps Sherwood had previously identified. Hole 155 returned 27.5 metres grading 2.43% copper, 2.14% zinc, 0.55 gram gold and 45.1 grams silver starting 107 metres down-hole. Hole 157 cut 33.4 metres grading 1.68% copper, 1.96% zinc, 0.28 gram gold and 29.8 grams silver.

The latest release tabulated 17 holes out of this year’s 78-hole drill campaign.

Sherwood has described Kutcho as its “next Minto” in reference to its operating copper mine in the Yukon. Minto produced 12.8 million lbs. of copper in the last quarter and has reserves of 9.13 million tonnes grading 1.93% copper, 0.74 gram gold and 7.73 grams silver.

Although the original production schedule at Minto has it winding down by 2015, ongoing drilling is outlining additional resources and mineralized areas that may sustain production targets set at 60- 70 million lbs. a year beyond that date.

Recent drill results from zones adjacent to the Minto open pit continue to return decent copper and gold grades. Area 118 cut as much as 24 metres grading 1.3% copper (gold results pending) and Ridgetop East cut as much as 68.8 metres grading 0.65% copper, 0.16 gram gold and 1.3 grams silver.

The latest results are in line with Sherwood’s initial resource estimates for the areas. It has so far pegged Area 118 at 6.6 million inferred tonnes grading 0.97% copper, 0.27 gram gold and 3.07 grams silver and Ridgetop at 4.9 million tonnes grading 0.85% copper, 0.23 gram gold and 2.01 grams silver.

Kutcho, with a planned mine life of 7.3 years and a 4,000-tonne-per-day mill, would be roughly the same size as Minto and could double Sherwood’s production.

Sherwood, however, may not be called Sherwood for much longer. Recently, it and Capstone Mining (CST-T, CSFFF-o) made waves by announcing a merger.

Capstone operates the Cozamin copper-silver-lead-zinc mine in Zacatecas state, Mexico, where in its most recent quarter it produced 6.7 million lbs. of copper.

The combined company could break the 100-million-lb. barrier of yearly copper production in 2009 if the merger goes ahead and production meets estimated targets. The merger agreement is subject to shareholder approval at Sherwood, and a Nov. 14 date has been set for a special meeting to vote on the matter.

On news of the latest drill results, Sherwood’s share price dropped 10 to close at $1.32.